RSM UK Restructuring warns recession starting to bite as all industries see increased insolvency numbers
According to the latest company insolvency data from Gov UK, there were 5,595 seasonally adjusted registered company insolvencies, including 4,800 creditors’ voluntary liquidations (CVLs), 492 company liquidations, 274 administrations, 29 company voluntary arrangements (CVAs), and there were no receivership appointments.
While the number of company insolvencies in Q3 2022 was 1% lower than in Q2 2022 after seasonal adjustment, the number of CVLs remained close to the highest quarterly level since records began in 1960. Additionally, in the four quarters ending Q3 2022, all industries saw increased insolvencies in comparison to the period ending Q3 2021.
Commenting on the latest figures, Gareth Harris, restructuring advisory partner at RSM UK,said: ‘These quarterly statistics confirm our current experiences that it is almost impossible to pinpoint a sector that is not being affected by the current economic situation. Whilst it may be no surprise that some insolvency numbers are now at their highest levels since the 1960s what is startling is the very significant increase in some of our key industries such as the 96% increase in wholesale and retail trade; repair of vehicles.
‘The challenge for businesses is the sheer number of individual pressures which are accumulating, with the latest being the significant increase in borrowing costs caused largely by the very recent economic instability.
‘These numbers also demonstrate the ongoing trend of smaller companies reaching the end of the line, but enquiries from larger companies more likely to face administration are also increasing as they use their reserves and cash balances built up over the last couple of years. As we clearly start to enter a recession, we fully expect that liquidations will remain at this high level for a considerable period, but that administrations will also increase to at least previous historic numbers and beyond.’